Miasole, a start-up specializing in solar cells made from copper indium gallium selenide, or CIGS, has raised $35 million in another round of venture financing. The Santa Clara, Calif.-based company had already raised $21.4 million.

CIGS has emerged as a technology that could challenge silicon solar panels. CIGS solar cells aren't as efficient at harvesting sunlight as silicon solar cells, but proponents say they will be much cheaper to manufacture.

CIGS panels use far less raw material than silicon solar panels and the factories themselves cost less to build, proponents say. Miasole CEO David Pearce has said that, for $25 million, Miasole can build a factory capable of churning out 100 megawatts of solar panels a year. (Pearce confirmed the $35 million investment in a brief phone call Friday, but did not comment on other topics.)

Although some have challenged Pearce's estimates as too low, CIGS factories are generally considered to be less capital intensive. A silicon solar factory capable of churning out 30 megawatts worth of panels a year can cost around $70 million.

The difference comes from the fact that silicon panels are made with processes similar to those for chips. CIGS materials are sputtered (or in some cases printed) onto thin, flexible foils or polymer sheets, typically with the same equipment used to make hard drives. The material is patterned on the foils with silk screens.

"We can make it in a T-shirt logo if you want," Terry Schuyler, vice president of sales and marketing at rival CIGS manufacturer DayStar Technologies, joked in a recent interview.

Shortages of silicon have crimped sales in the solar industry. Although some analysts have said indium--the "I" in CIGS and a material used in LCD TVs--could be in short supply at some point, executives in the CIGS business have downplayed these concerns. Indium is actually fairly common in the earth, according to Schuyler.

The catch? CIGS solar cells are mostly only made now in small batches for experimental installations. Miasole and DayStar, which plans to begin volume manufacturing in the first part of 2007, will be two of the first to move toward mass-manufacturing.

Investors, though, are flocking to the concept. Nanosolar, another CIGS company, raised $100 million earlier this year to build factories capable of putting out 430 megawatts of panels a year. (The number means that, if you got together all of the solar panels produced by the factory in a year, they could produce at a given time 430 megawatts worth of power. A major, coal-burning power plant can churn out about 500 megawatts a year.)

If Nanosolar can build its factory, it will become one of the largest solar-panel manufacturers in the world. Investors in the company include Google co-founders Sergey Brin and Larry Page. Google, however, chose to go with silicon solar panels from Sharp, the current world leader in solar, for its plans to build the largest solar installation in the United States. Sharp concentrates on silicon, but is also looking at other materials.

Earlier this fall, Pearce said that Miasole's factory capacity is scheduled to reach 200 megawatts a year by the end of the 2007. He also said the company has set a goal of $100 million in revenue for 2007 and of profitability in that year. Miasole hopes to

HelioVolt, another CIGS manufacturer, is also seeking funds. It has already landed venture funds from New Enterprise Associates, among others.